A Nonuniform Pricing Model of Union Wages and Employment

Peter Kuhn

Journal of Political Economy, 1988, vol. 96, issue 3, 473-508

Abstract: Unlike implicit contracts models, the nonuniform pricing model of unions assumes that firms can always shut down ex post to avo id any payments to the union. Under this restriction, employment can differ from a first-best even if both workers and firms are risk neut ral. In general, the union chooses to offer quantity discounts on lab or and needs to use a seniority rule that regulates the order in whic h workers are hired to implement these discounts. Unions lower (almos t) all workers' employment probabilities and increase the cyclical vo latility of employment, and the union-nonunion average wage different ial will move countercyclically. Copyright 1988 by University of Chicago Press.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://dx.doi.org/10.1086/261548 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JPE for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:v:96:y:1988:i:3:p:473-508

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().